June 8, 2004 – Crosby & Higgins LLP Secures $2.3 Million Judgment at Trial; Pierces “Corporate Veil”
June 8, 2004
After more than a week of trial in the Commercial Division of New York State Supreme Court, the Higgins Law Firm and the Law Offices of Mark Crosby have pierced the Defendant’s “corporate veil” and obtained a judgment of approximately 2.3 million dollars for the plaintiff Manshion Joho Center, Co., Ltd., in a protracted breach of contract action.
The contract in this case was part of an agreement whereby the Plaintiff in August of 1997 sold its short term hotel style properties in New York City to the corporate Defendant. As part of that transaction, the Defendant granted Plaintiff a twenty year exclusive agency in Japan for marketing and booking reservations for Japanese travelers to the properties and also agreed to pay Plaintiff 1.5 million dollars within 30 days of the effective date of the agreement. Defendant failed to make that payment and subsequently refused to accept any reservations made by Plaintiff in Japan.
After years of litigation and significant motion practice, the issues at trial were reduced to two questions: (1) whether the Plaintiff breached the agreement first by failing to properly remit reservation deposits to the corporate Defendant during the first month of the agreement; and (2) assuming the corporate Defendant were liable for the breach, whether the corporate veil should be pierced and its controlling shareholder held personally liable.
Acting as trial counsel along with Plaintiff’s regular counsel Mark Crosby, Esq., Attorney Todd A. Higgins, Esq. contended in his closing argument that the evidence irrefutably showed that Plaintiff had performed all of its obligations under the agreement by remitting the appropriate amounts of reservation deposits and was therefore entitled to the 1.5 million payment plus lost profits. With respect to veil piercing, Mr. Higgins argued to the Court that the controlling shareholder completely dominated the corporate Defendant with respect to this transaction, operated the company with total disregard for corporate formalities, and wrongfully used the corporate Defendant as a vehicle to advance his own personal interests—namely by entering into highly suspect transactions which had the effect of systematically depleting the corporate assets acquired in the transaction with Plaintiff and transferring those assets to individual shareholders.